A Machine Purchased by White Ltd Had a Cost of $670

question 36

Multiple Choice

A machine purchased by White Ltd had a cost of $670 000 and an accumulated depreciation balance of $120 000 at 30 June 2012.Its fair value is assessed at this time,with its first revaluation as $450 000.What is/are the appropriate journal entry(ies) to record the revaluation using the net method?

• A)
• \[\begin{array} { | l | l | l | l | }
• \hline \mathrm { Dr } & \text { Accumulated depreciation -machine } & 120000 & \\
• \hline \mathrm { Cr } & \text { Machine } & & 120000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Asset revaluation reserve } & 100000 & \\
• \hline \mathrm { Cr } & \text { Machine } & & 100000 \\
• \hline
• \end{array}\]
• B)
• \[\begin{array} { | l | l | l | l | }
• \hline \mathrm { Dr } & \text { Loss on revaluation of machine } & 220000 & \\
• \hline \mathrm { Cr } & \text { Machine } & & 220000 \\
• \hline
• \end{array}\]
• C)
• \[\begin{array} { | l | l | l | l | }
• \hline \mathrm { Dr } & \text { Accumulated depreciation-machine } & 120000 & \\
• \hline \mathrm { Cr } & \text { Machine } & & 120000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Asset revaluation reserve } & 100000 & \\
• \hline \mathrm { Cr } & \text { Accumulated depreciation-machine } & & 100000 \\
• \hline
• \end{array}\]
• D)
• \[\begin{array} { | c | l | c | c | }
• \hline \mathrm { Dr } & \text { Accumulated depreciation-machine } & 120000 & \\
• \hline \mathrm { Cr } & \text { Machine } & & 120000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Loss on revaluation of machine } & 100000 & \\
• \hline \mathrm { Cr } & \text { Machine } & & 100000 \\
• \hline
• \end{array}\]